H.U. from New Jersey writes:
Dear Mister Condo,
Is a condo considered residential property? Not commercial like an apartment complex? How should the evidence of insurance be “titled” – the insured should read in the name of the complex homeowners’ association name?
Mister Condo replies:
H.U., that is an interesting question and I would suggest that it is one best left to your insurance underwriter who will know what the proper nomenclature would be. The association itself purchases the Master Policy, Directors & Officers Policy, Fire, Flood, etc. for the association’s interest. Both the governing documents and, in many cases, state law obligates them to purchase these insurances would most likely be commercial policies because they protect the association, which is typically a not-for-profit business. As a unit owner, the insurance you would purchase is a homeowner’s policy but can have other names including apartment insurance because you are insuring your own residential contents. It is not uncommon for mortgage companies to ask individual unit owners to provide proof of insurance for the entire complex as part of their agreement to provide a mortgage to an individual unit owner. The mortgage company wants to see their company listed on the condo’s Master Policy in case the building is destroyed and the association decides not to rebuild. All of this can feel a bit daunting which is why I suggest you speak with your own homeowners’ insurance company to understand which insurance is right for you and how your insurance would cover you in the event of a loss. Of course, the best policy is one you never need. All the best!